Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Chipotle (NYSE:CMG) and the best and worst performers in the modern fast food industry.
Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.
The 6 modern fast food stocks we track reported a strong Q2; on average, revenues beat analyst consensus estimates by 1.5%. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, but modern fast food stocks have performed well, with the share prices up 10.5% on average since the previous earnings results.
Chipotle (NYSE:CMG)
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Chipotle reported revenues of $2.97 billion, up 18.2% year on year, exceeding analysts' expectations by 1.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts' gross margin estimates and a narrow beat of analysts' earnings estimates.
"The second quarter was outstanding as successful brand marketing, including the return of Chicken Al Pastor, drove strong demand to our restaurants. Our focus and training around throughput paid off as we were able to meet the stronger demand trends with terrific service and speed driving over 8% transaction growth in the quarter," said Brian Niccol, Chairman and CEO, Chipotle.
The stock is up 7.4% since reporting and currently trades at $55.60.
We think Chipotle is a good business, but is it a buy today? Read our full report here, it's free.
Best Q2: Potbelly (NASDAQ:PBPB)
With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ:PBPB) today is a chain known for its toasty sandwiches.
Potbelly reported revenues of $119.7 million, down 5.5% year on year, in line with analysts' expectations. It was a very strong quarter for the company with an impressive beat of analysts' gross margin estimates and a solid beat of analysts' earnings estimates.
The market seems happy with the results as the stock is up 5.3% since reporting. It currently trades at $7.21.
Is now the time to buy Potbelly? Access our full analysis of the earnings results here, it's free.
Sweetgreen (NYSE:SG)
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.
Sweetgreen reported revenues of $184.6 million, up 21.1% year on year, exceeding analysts' expectations by 2.1%. It was a mixed quarter for the company with a decent beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.
Interestingly, the stock is up 32.9% since the results and currently trades at $34.90.
Read our full analysis of Sweetgreen's results here.
Noodles (NASDAQ:NDLS)
Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.
Noodles reported revenues of $127.4 million, up 1.8% year on year, falling short of analysts' expectations by 2.6%. Zooming out, it was a weaker quarter for the company with full-year revenue guidance missing analysts' expectations and a miss of analysts' earnings estimates.
Noodles had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is up 2.1% since reporting and currently trades at $1.49.
Read our full, actionable report on Noodles here, it's free.
Shake Shack (NYSE:SHAK)
Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.
Shake Shack reported revenues of $316.5 million, up 16.4% year on year, in line with analysts' expectations. Overall, it was a very strong quarter for the company with an impressive beat of analysts' gross margin estimates and a narrow beat of analysts' earnings estimates.
The stock is up 16.9% since reporting and currently trades at $102.39.
Read our full, actionable report on Shake Shack here, it's free.
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